Aecon Group (ARE) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $1.631 billion (CAD 1.6 billion), up 25% year-over-year, with 80% of growth organically generated and strong performance across all Construction segments, especially utilities.

• Adjusted EBITDA doubled to $82.4 million, driven by margin improvements in construction and utilities.

• Operating profit rose to $36.4 million from $2.3 million a year ago.

• Backlog stood at $10.5 billion, with significant new awards and major project milestones including substantial completion and opening of the Gordie Howe International Bridge.

• Announced agreement to purchase Oaktree's preferred equity in Aecon Utilities for $320 million, closing expected Q4 2026.

Financial highlights

• Adjusted diluted EPS was $0.33, up from a loss of $0.10 last year; reported diluted loss per share was $1.58 due to a $128 million fair value adjustment on preferred shares.

• Free cash flow for the trailing 12 months was $300.8 million, a significant turnaround from negative $10 million last year.

• Net debt at quarter-end was $672 million; net debt to trailing 12-month adjusted EBITDA was 2.2x.

• Gross profit for Q2 2026 was $154.6 million, up from $76.9 million in Q2 2025; gross margin improved to 9.5% from 5.9%.

• Quarterly dividend of $0.1925 per share declared, payable October 2, 2026.

Outlook and guidance

• Expects double-digit revenue growth for full year 2026 and further growth in 2027, supported by a robust backlog, recurring programs, acquisitions, and a pipeline of major projects.

• Anticipates stabilization and gradual improvement of adjusted EBITDA margins in construction as legacy fixed-price projects are completed.

• Capital expenditures in 2026 projected to exceed 2025 levels to support growth initiatives.

• Recurring revenue from utility services increased 30% year-over-year to $868 million.